German Energy Companies Threaten Shutdown Of Power Plants

German operators of coal and gas power plants are sounding the alarm: the operation of many power plants is no longer profitable as a result of the green energy transition. Dozens of plants could be closed down, the industry warns.
Numerous coal and gas power plants apparently are threatened by a shutdown. According to a report in the Süddeutsche Zeitung(SZ), many companies and municipal utilities are assessing the cost of dozens of power plants. As a result, the security of supply is at risk because many of the plants could be shut down. Of approximately 90,000 megawatt of conventional power capacity in Germany up to 20 percent could be shut down, the newspaper quoted the CEO of a utility. In the worst case scenario, Germany would face blackouts.

Since an amendment of the Germany Energy Act (EnWG) in late 2012, there is the legal possibility of prohibiting the shut down of larger power plants.
Section 13a para. 1 EnWG stipulates that operators of plants generating or storing electricity with a rated power of 10 MW or more are required to inform the responsible transmission operator and BNetzA at least twelve months prior to a preliminary or permanent closure of power plants or parts thereof. According to Section 13a para. 2 EnWG a permanent closure of plants generating or storing electricity with a rated output of 50 MW or more is prohibited after the expiry of the period set out in Section 13a para. 1 EnWG if

the responsible TSO declares the plant “system-relevant”;

BNetzA approved this assessment;

and it is technically and legally possible to continue operations.

A plant is deemed “system-relevant” if it is sufficiently likely that a permanent closure would lead to a substantial danger for or an interference with the safety or reliability of the electricity supply system and cannot be overcome by other suitable measures.
In June the government passed the so-called Reservekraftwerksverordnung (Ordinance on Reserve Power Plants – ResKV), which further specifies the above provisions. It also set the requirements for an “appropriate remuneration” (cf. Section 11 paras. 2 to 4 ResKV).

I've long written about the issues adding variable renewable energy sources (vRES) to a grid, aincluding in Electricity Sector Lessons from Ontario and Germany. Once Germany introduced an option of paying for critical capacity, there was bound to be a lot of interest in claiming to want plants shuttered simply to get the money to stay open.

German power utilities E.ON and EnBW within days both announced plans to mothball fossil-fuel power plants in Europe that can no longer compete with renewables in electricity markets.

E.ON late Monday announced it will halt its 430MW combined-cycle gas power plant in Malzenice, Slovakia. It had only entered service in January 2011, but in the past two and a half years has only operated for about 5,600 hours.
The unit, whose fuel efficiency exceeds 58%, was planned to operate at least 4,000 to 5,000 hours per year, E.ON says.

My take: Germany will need to offer capacity payments, of some type, to maintain adequate dispatchable supply to meet peak demand.
Utilities will want to reduce supply to drive up price.
If other countries don't follow a German lead to offer capacity payments to keep dispatchable generators operating, their dispatchable generators will be the ones to be closed.
Particularly if they are owned by German utilities.